NWP and FMO start joint study to understand international positioning Dutch private water sector
The main objective of the study is to increase the understanding about where various Dutch water sector players typically position themselves in the project development chain and what is needed to position them better, both in developing countries and emerging markets (DAC-countries) and developed countries (Europe / OECD).
In November 2017 a MoU was signed between the Dutch development bank (FMO) and the Netherlands Water Partnership (NWP) with the aim to develop at least 2 water initiatives within one year. In order to fulfill this ambition, FMO and NWP have had several 'pipeline meetings' in order to assess which projects have the most potential to receive project development support and reach financial close, building on the assumption that project development is one of the main challenges why Dutch water initiatives struggle to get involved in implementation of water initiatives other than with consultancy contracts and/or export contracts. During these meetings, FMO and NWP came to the joint conclusion that too little is known about how/where various Dutch companies position themselves in the project development chain and what the exact financing needs are consequently. Hence the need for a study.
FMO and NWP have engaged in the MoU to intensify collaboration in the field of development of water initiatives. The role of NWP is to mobilize the Dutch Water Sector (DWS) around specific international water initiatives and for FMO to develop and structure these initiatives in such a way that it becomes attractive for various financial partners. As such, NWP and FMO are now working on the development of 2 concrete projects in West-Africa and Latin America.
In addition to the partnership with FMO, which focuses on Development Assistance Countries (DAC) NWP is developing a broader Finance for Water strategy, which also includes Europe and possibly some more OECD countries. Whereas it is relatively clear that the whole project development chain is a challenge in DAC-countries, it is less clear what the various Dutch companies' challenges are in European and OECD countries and how they relate to the positioning of the Dutch companies within the project development chain. Studies such as the Water Export Index, for instance, show that access to finance is seen by Dutch companies as an important challenge in these markets, but the exact nature of these challenges remain unclear.
The study will provide guidance for FMO and NWP on how to effectively support the Dutch water sector in getting transactions done abroad.